MW Dow set to see first 'death cross' since 2023 - but here's the good news

By Joseph Adinolfi

On Thursday, the Dow Jones Industrial Average is set to become the latest major U.S. equity-market gauge to experience a "death cross."

It would be the first time the ominous signal has appeared on the price chart of the blue-chip stock gauge since November 2023, according to Dow Jones Market Data. The Dow DJIA was on track to shed 261 points, or 0.6%, in trading at 39,416 on Thursday.

The "death cross" for the Dow comes just a few days after similar signals flashed for the S&P 500 SPX and Nasdaq Composite COMP. In March, the Russell 2000 RUT experienced one as well.

See: S&P 500 tallies its first 'death cross' in 3 years. Here's what happens next.

A death cross is seen by technical analysts as an ominous signal. It occurs when the 50-day moving average of an asset or index crosses below its 200-day moving average. This is typically taken as a sign that a correction might be morphing into a more powerful downtrend.

However, historical data show investors don't have much reason to be concerned. In the past, death crosses have been followed by largely mixed performance for the S&P 500 and Nasdaq. On average, more losses were seen over the following month - but by the six-month mark, returns were back in the green.

For the Dow, performance after a death cross has been consistently positive, even in the short term. Dow Jones data tracking performance after every death cross since 1950 show the Dow was marginally higher one week later, with even stronger gains further out.

Following the last 20 death crosses, the Dow's performance has been, on average, even stronger.

This is why some on Wall Street refer to death crosses as a lagging indictor. That is, it essentially is telling us what we already know: That the asset or index has been falling. As far as what might come next, it's predictive power is more muddled.

"A technical death cross isn't the end-all, be-all knockout that it might seem to be," said Bret Kenwell, U.S. investment and options analyst at eToro.

Both the S&P 500 and Nasdaq were on track to finish higher on Thursday, despite wavering between gains and losses earlier in the session. The U.S. equity and bond markets will be closed on Friday for the Good Friday holiday.

-Joseph Adinolfi

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April 17, 2025 14:56 ET (18:56 GMT)

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